ECONOMICS 10010-01/20010-01

MICROECONOMICS
SPRING 2006
RUCCIO

PRINCIPLES

OF

DAVID F.

Office: 410 Decio

Telephone: 1-6434
Email: Ruccio.1@nd.edu
Office hours: Monday, Tuesday, and Wednesday, 3-4 pm and by appointment
Web: www.nd.edu/~druccio/Intro-01-S06.html
There are three parts to this reading list and course. Part 1 is an introduction to
economic theories, economic history, and the concepts of supply and demand.
There are many microeconomic theories in the world today. The most prevalent in
the United States is called neoclassical economics. Neoclassical microeconomic
theory arose within the social (economic, political, and cultural) conditions of the
late-nineteenth century. According to neoclassical economists, all economies and
economic events can be understood in terms of supply and demand. The first part
of the course, therefore, covers the following topics: the basic theoretical debates
between neoclassical and other economic theories, the history of neoclassical
microeconomic theory, and the basic notions of supply and demand.
Part 2 concentrates on the neoclassical theory of supply and demand. What
determines the supply and demand behavior of individuals and firms? According
to neoclassical economists, given aspects of naturepreferences, technology, and
endowmentsare the underlying determinants of supply and demand and, thus,
of market prices and the distribution of income. Therefore, in the second part of
the course, we will examine carefully the concepts and method of the neoclassical
"theory of value," from the initial determinants to the final outcomes, as well as
the economic implications of neoclassical microeconomic theory.
Part 3 returns to the issue of different economic theories. It is designed to sharpen
your knowledge of neoclassical theory by examining some of the extensions,
shortcomings, and criticisms of that theory and by comparing it to alternative
theories. We will also discuss the importance of these theoretical differences for
economic policymaking and for the other economic decisions that we make on a
daily basis.
Together, these three parts comprise the principles of microeconomics: first, a
discussion of different economic theories, their history, and the concepts of supply
and demand; then, an examination of the neoclassical theory of value; and,
finally, an introduction to some of the extensions and criticisms of neoclassical
theory and to the contemporary debate among and between different economic
theories.
Course Requirements. All students are expected to complete the assigned
readings, before the material is covered in class, and to participate fully in
classroom discussions, especially in the discussion sections. In addition, grading

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will be based on three examinations, one after each part of the course outline.
Each of these examinations will make up one third of the final grade.
Texts and Readings. Two textbooks have been ordered for the course:
Microeconomics, 18th edition, by Paul A. Samuelson and William D. Nordhaus
(hereafter, Samuelson & Nordhaus) and Economics: Marxian versus Neoclassical,
by Richard D. Wolff and Stephen A. Resnick (hereafter, Wolff & Resnick). All of the
required reading for the course is from these two texts.
PART I: ECONOMIC THEORIES, HISTORY, SUPPLY AND DEMAND
Introduction: Economic Theories and History (18, 23 & 25 January)
Samuelson & Nordhaus, Chapter 1 (pp. 3-8)
Wolff & Resnick, Chapter 1
Production Possibilities (30 January)
Samuelson & Nordhaus, Chapter 1 (pp. 8-14) & Appendix 1 (pp. 18-23)
The Basic Concepts of Supply and Demand (1, 6, 8, 13, 15 & 20 February)
Samuelson & Nordhaus, Chapters 3, 4 & 8 (pp. 155-57)
EXAM 1 (21 February, 8-9:15 am, 101 DBRT)

PART II: NEOCLASSICAL THEORY OF VALUE

Introduction: Neoclassical Theory of Supply and Demand (22 February)
Wolff and Resnick, Chapter 2 (pp. 38-50)
Preferences and Demand (27 February & 1 March)
Samuelson & Nordhaus, Chapter 5 & Appendix 5
Wolff & Resnick, Chapter 2 (pp. 50-59)
Incomes: Wages (6 & 8 March)
Samuelson & Nordhaus, Chapters 12 & 13 (pp. 243-57)
Wolff & Resnick, Chapter 2 (pp. 59-72)
Incomes: Profits (20 & 22 March)
Samuelson & Nordhaus, Chapter 14 (pp. 273-79)
Wolff & Resnick, Chapter 2 (pp. 72-80)
Costs and Supply (27 & 29 March)
Samuelson & Nordhaus, Chapters 6 (pp. 107-18), 7 (pp. 124-33) & 8 (pp.
147-55)
Wolff & Resnick, Chapter 2 (pp. 80-85)
Conclusions (3 April)
Samuelson & Nordhaus, Chapter 8 (pp. 158-62) & Appendix 14
Wolff & Resnick, Chapter 2 (pp. 85-95)
EXAM 2 (4 April, 8-9:15 am, 101 DBRT)

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PART III: EXTENSIONS, CRITICISMS, AND ALTERNATIVE
THEORIES
Comparative Advantage (5 April)
Samuelson & Nordhaus, Chapter 15
Imperfect Competition (10 April)
Samuelson & Nordhaus, Chapter 9 & 10 (197-200)
Game Theory (12 April)
Samuelson & Nordhaus, Chapter 11 (pp. 212-20)
Discrimination, Externalities, and Inequality (19 & 24 April)
Samuelson & Nordhaus, Chapters 13 (pp. 257-60), 18 (370-78) & 19 (pp.
382-400)
Resnick & Wolff, Chapter 2 (pp. 95-99)
Marxian Economics (26 April & 1 May)
Resnick & Wolff, Chapter 3 (pp. 125-71)
Theoretical Differences (3 May)
Wolff & Resnick, Chapter 4
FINAL EXAM (11 May, 1:45-3:45 pm)